Order activated above Take Profit

Hi all,
During the recent CHF spiking I had a pending stop buy order activated 100 pips above its order level. Attached to the order was a TP which was 20 pips above the order level. Of cause the TP could not be activated.

Ok what I need to know is.
1 does the order become void once it reaches the TP level (if not why not as this defies logic)
2 If its not void and activated above then does the TP now become a Stop loss?

The order was placed with MT4 on a ECN Broker (IC Markets)

I cannot find any information on this so I hope someone can help because IC Markets wont.

Take a Banana, go into your garden on your own. Now try and sell your Banana.

No takers?

That was not very helpful. I would like a informed reply to the questions posed If anybody knows the answer.

Ok,ok. Just having fun.

It sounds like the initial spread widening activated your trade, but then due to lack of liquidity you were subsequently unable to close the trade (sell your position for a profit) as there were no buyers. Infact, there was no market, as liquidity provider price feeds stopped.

TP/SL is not a guarantee, it's an order, just like a buy/sell stop order to activate a trade.

Before you place another trade, please go and read as much as you can about slippage. You need to know what you are dealing with and how the market works.

Ok . Does not seem logical. But it would appear that brokers and their liquidity providers are dealing with a marked deck.
The brokers software must have the ability to remove a overrun order but choose not to.

Most FX shops will tell you in their t&c that you are trading off exchange rather than placing orders directly in the market. So they are making the prices, buying from you and selling to you, and deriving prices from their LPs and the underlying interbank market, which they are using to move large positions in and out, hedge positions etc. You are essentially participating by proxy, FX handled in this manner is known as a synthetic product - a bet on a bet.

(out of interest - a bet on a bet, a derivative or a synthetic product doesn't sound like a great idea, does it? did you know that the derivative market that all of the major banks are exposed to is more than $500 trillion? That doesn't sound like a good idea either, does it?! tick, tick, tick...)

Anyway, my guess is that your trade was activated in their synthetic market whilst prices from the underlying market were failing. So they are now holding your trade, but can't add it to their pool and trade it on within the interbank market. So, yes, in this way things are somewhat stacked against you as they pass off the responsibility of selling your position and blame it on lack of liquidity, though they are all to happy to activate your trade on their synthetic market and then hide behind the t&c.

Sadly the biggest thing that works against you is leverage, but this is really an unpopular subject to bring up so I'll let you figure that one out for yourself.

Is there anyway to trace a trade to identify if it was place onto the market or was a "sinthetic" trade.

All of your trades are synthetic - read the t&c, you are trading off exchange, a make believe market with a close resemblance to the real market. What the FX broker does with your trade is out of your hands, at their discretion, and frankly none of your business (not trying to be an ass, this is just the truth), as per their business model, risk management strategy, etc etc.

The truth would be a fine thing. Then one is able to assess the risk. I expect losses but theft is not acceptable.
I will just have to use the information I already have to bring a case against the broker.

Sorry to say, but you signed a contract to say that you were happy to trade a synthetic market using absurd leverage. I don't think you really understood the full implications of what you were agreeing to. You are not alone in this, which is why we are seeing such a massive fallout from this sorry episode.
As it says in my signature - caveat emptor!

You are correct I did not understand, even though I read the agreements, and other l eagle documents
Thanks for your time and guidance, Apreciated.

You are very welcome. The absolute safest way to trade currency is at 1:1 leverage with no stop loss. This sounds like madness, but consider this (we'll ignore exchange commission charges for the sake of this example):

The EUR/USD is trading at 1.2000

You swap $1200 for Eur1000.

It sits in your bank account.

EUR/USD drops to 1.1000.

You wait.

Six months later, by some miracle, the Eurozone is on it's way to being fixed and everyone in Greece has a job.

The EUR/USD trades back up to Eur1.4000.

You swap your Euros back to USD. Now you have $1400.

At no point were you concerned, as you always had a lump sum of Euros, could easily take the swings in price, didn't have to realise a loss at all. The biggest risks were - 1. Euro goes to zero and becomes worthless, or, 2. Euro never reaches 1.2000 (or beyond) ever again.

Now apply this strategy to an already uptrending currency with a solid fundamental reason to continue appreciating in value (i.e interest rate increase, good economic outlook, confidence in the currency, safe haven status) like we have recently seen with USD. Buy every time you see a good opportunity (i.e recent high, followed by a higher low) and continue doing this until the trend ends (i.e caused by an economic downturn, interest rate cut, growing unease, less attractive as a safe haven) . You will make a return.

If you keep this example in mind, then you can think how to build on this very basic idea when using leverage, stops, risk management etc etc. How far away from this basic model is your strategy, and how much more risk is included? How can you lock in profits on the way up? How much room does your trade have to allow for short term swings in an overall trend?

I hope this helps, and I hope you manage to resolve your situation.

Very interesting concept. Will need to do some work on it.